Fluctuating wheat markets widen the gap between new and old crops

Tensions over the attempted coup in Russia led to some bullishness in wheat markets earlier in the week, which has since been reversed.

The UK continues to follow the broader global markets, with both Chicago and Paris futures tracking.

Volatile periods in the wheat markets saw UK wheat futures trading between £198/t and £212/t for the November contract over the past week.

Also Read: Weather Concerns Push UK Wheat Futures Above £200/t

UK November feed wheat futures opened at £201.95/t on 28th June, taking the new season’s crop more than £20/t up on the current July contract.

But rainfall in the US Corn Belt has helped reduce the overall area affected by the drought, weighing on global markets.

The US Department of Agriculture reported that rain was encroaching on the edges of the corn belt, providing much-needed moisture in some regions. However, there was little or no rain in a central drought area in the Midwest.

The Black Sea Grain Export Agreement will continue to impact global grain markets in the coming weeks as the July 18 extension deadline nears.

There is speculation in the industry that Russia will not extend the deal beyond the deadline.

The United Nations Joint Coordination Center (JCC) has already noted a drop in export volumes across the corridor.

fertilizer

While arable markets remain volatile, falling input costs, particularly for fertilizers, could bring relief to farmers.

Some agribusinesses have attempted to hold on to current fertilizer prices to limit further volatility, but traders have warned that supplies remain tight.

Fertilizer prices in the UK have continued to fall, with the UK ammonium nitrate price averaging £390/t in May compared with £716/t in the same month last year.

The latest AHDB figures for granular urea averaged £396/t while potash averaged £546/t.

Lower gas prices have helped keep fertilizer prices low, although there has been some recent increase.

UK natural gas futures opened on June 28 for the July contract at 86.7 pence/therm, up more than 20 pence/therm month-on-month, but that’s still less than half the price beginning of the year.

Grains and commodities trader ADM said that last week European nitrogen markets were focused on the impact of the reintroduction of a 6.5% tariff on ureas imported into the EU from other origins and a 5.5% tariff on ammonia imports .